Online-gamer 888 Holdings drops 6%

FTSE 100 higher; BP shares dip

SarahTurner

LONDON (MarketWatch) -- London investors sold shares in online gaming firm 888 Holdings on Tuesday after the company posted disappointing quarterly key performance indicators.

888 Holdings (888) shares lost 6% in London after its net gaming revenue declined 4% quarter-on-quarter, and active members fell 9% to 281,402 in a year.

888 attributed the lower number of active players to timing of the soccer World Cup and historical trading patterns.

It also said its total second-quarter net gaming revenue rose 23% to $80 million, compared to a year ago, due to a 48% increase in poker revenue to $35 million. Revenue from casino gaming operations rose 9% to $45 million.

The company said that around 67% of its new real-money members were recruited from outside the U.S during the first half of 2006.

It made this reference to the U.S. in the wake of the arrest of eleven people, including BetOnSports' CEO, David Carruthers, who face charges of racketeering, avoiding taxes, corruption and fraud, for offering sports betting to Americans.

BetOnSports (BSS) in turn said on Tuesday that it has terminated the contract of David Carruthers, because he remains in detention in the U.S. and therefore cannot perform his CEO duties. The company said it has been unable to speak directly with Carruthers.

Separately, BetOnSports said that there have been media reports which have focused on alleged improper activity occurring at its Costa Rican business premises.

All these allegations relate to the time prior to the acquisition of the business by the company and its July 2004 flotation, it said. It added that it believes it has operated in accordance with the standard expected of a U.K. company quoted on the Alternative Investment Market of the London Stock Exchange. BetOnSports shares remain suspended in London. See full story.

The U.K. FTSE 100 index (UKX) closed up 0.3% at 5,851 as mining and some oil companies offered support. European shares were mixed. See Europe Markets.

Oil major BP
BP, -1.85%
(BLT) fell 0.6% after saying it now expects capital expenditure of $15.5 billion to $16 billion for 2006, while reporting a stronger-than-forecast 23% increase in second-quarter profit on a replacement-cost basis to $6.12 billion. The company's CEO, John Browne, will also leave at the end of 2008, he told CNBC Europe television. See BP story.

British Airways
BAB, -0.05%
(BAY) provided a lift for the benchmark, rising 3% after Morgan Stanley upgraded the company to equal-weight from underweight, saying it believes the market will focus on operational performance at the airline, rather than labor and regulatory issues.

The bank said that it believes revenue growth for the first quarter of fiscal 2007 will be at the top end of the 5% to 6% guidance range, with costs, excluding fuel, likely to be kept in check. British Airways is also positive that a solution to labor issues over pensions and wages can be reached.

Shares of Shire (SHP) also made strong gains for the second day. The pharmaceutical rose 3%, after it received Food and Drug Administration approval for its Elaprase treatment for Hunters syndrome ahead of schedule. The company reports second-quarter results on July 28. See more global markets coverage.

Technology a focus

Chipmaker Arm Holdings
ARMHY
(ARM) advanced 5.7% after it said second-quarter pretax profit rose 17% to 23 million pounds ($42.6 million) as revenue rose 14% to 65.7 million pounds. Analysts were expecting pretax profit of 22.5 million pounds, with revenue in a range of 63.1 million pounds to 64.6 million pounds, according to AFX News.

The growth in revenue was due to an increase in the number of licenses the company issued and higher royalties. Arm said it signed 45 license agreements in the quarter. Arm said it remains confident of achieving strong growth for the year, in line with market expectations.

And software company Misys (MSY) jumped 2.9% after saying it has received a number of indicative bids for the whole or part of the company, and has decided to open its books to allow potential bidders to perform due diligence.

Misys said there is no guarantee that an offer for the company will be forthcoming. Misys received the offers after it decided to allow certain senior managers to explore the possibility of a management buyout.

Anglo-Dutch IT services company LogicaCMG (LOG) increased 1.4% after Morgan Stanley upgraded the company to overweight from equal-weight, citing valuation and a solid trading update for the first half of the year. See more technology coverage.

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